One of the biggest mistakes that I see real estate investors make is not properly accounting for capital expenses on their rental properties.
Heck, I don’t help the matter at all by largely skipping the discussion of capital expenses when I teach classes on deal analysis.
However, in The World’s Greatest Real Estate Deal Analysis Spreadsheet™ (a free download that is emailed to you when you sign up for this substack and pretty much every email thereafter) there is a spot for modeling capital expenses.
Plus, I provide TWO (slightly) different spreadsheets for estimating what number you should put in that spot when modeling capital expenses on The World’s Greatest Real Estate Deal Analysis Spreadsheet™.
Basic CapEx Estimator
One is a basic tool for estimating CapEx. It looks like this…
Download a copy of it here.
Advanced CapEx Estimator
The other is an advanced tool for modeling CapEx. It looks like this…
It does a much, much better modeling of CapEx. Download a copy of it here.
Estimating CapEx
If you’re an experienced real estate investor, you’ll get a feel for what it costs for various capital expenses and how frequently they occur over time as you personally experience these expenses.
However, how do you estimate these expenses and how frequently they occur if you’re a newer real estate investor?
You could call up a bunch of contractors to get estimates of what it might cost.
And, honestly that’s not the worst idea in the world.
Or, you could use AI to estimate what it might cost utilizing a prompt something like this:
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